The Franco-Italian-American marriage finally took place: the PSA and FCA groups officially unite this Saturday to form the Stellantis group.
Fiat, Opel, Peugeot, Alfa Romeo, Chrysler, Dodge, Jeep and Maserati will now be released from the factories of the worlds fourth automotive group. The 14 brands of the group represent about 9% of the global automotive market, for 8 million vehicles sold in 2019.
“We will play a leading role over the next decade by redefining mobility as our founding fathers have done with great energy,” said FCA President John Elkann in early January, referring to a “historical fusion.”
On Monday, the leaders of the new group must launch the Stellantis action (“star-strewn”, in Latin) on the markets of the Milan and Paris Stock Exchange, and then on Tuesday on the New York Stock Exchange.
On Tuesday, the former Chairman of the Executive Board of PSA and new CEO of Stellantis Carlos Tavares must unveil at a first press conference his vision for the group of 400,000 employees, before presenting his strategic plan in the coming months.
There are many challenges, between the electrification of ranges, motorists looking to the opportunity or rental and the health crisis that weighs on the manufacture and sales of vehicles. Global sales of PSA (Peugeot, Citroën, DS, Opel, Vauxhall) fell by 27.8% in 2020.
Matthias Heck of Moodys sees the merger as groups “improve their global coverage, can collaborate at the technological level and in various segments, and will save money thanks to the synergies and experience of PSA, which has been able to set the right price and manage its costs.”
PSA and Fiat-Chrysler estimated that synergies would ultimately save up to €5 billion per year in manufacturing costs and research. These economies are worrying both trade unions and states.
Rome to capital?
After opposing Fiats marriage with Renault, the French government welcomed the birth of Stellantis with the Italian government.
However, on both sides of the Alps, we will ensure that the new colossus “also contributes to industrial employment in Italy and France”, said at the beginning of January the French Minister of Economy Bruno Le Maire and his Italian counterpart Stefano Patuanelli.
To maintain control, Italy even plans to enter the capital of Stellantis: “a possible presence of the state in the share capital of the new group, similar to that of the French government, cannot and must not be a taboo,” Italian Deputy Minister of Economy Antonio Misiani told La Repubblica. The French State has a capital of Stellantis to the tune of 6.2%.
To carry out this merger in accordance with competition rules, the two groups have reduced their dominance in the small utility sector.
They also amended their contracts so that their union remains a marriage between equals. FCA has lowered the amount of an exceptional dividend paid to its shareholders from €5 billion to €2.9 billion. PSA has withdrawn from the equipment manufacturer Faurecia.
On the trade union side, the majority accompanied a merger which they considered inevitable. But they stay on guard. “See you in a year!” , summarized in a press release the FO delegate to PSA, Olivier Lefebvre. “Our confidence in the future will obviously be accompanied by vigilance throughout the year on the adequacy of social and industrial policies.”
The planned synergies are also of concern to OEMs that provide both groups. “There are challenges to be expected but also opportunities,” Claude Cham, president of the Federation of Equipment Manufacturers (FIEV) told AFP. “In both cases, international OEMs will be in the best position to meet demands. The smallest and least international and diverse are the most at risk”.
By CCEiT (AFP)